Save content
Have you found this content useful? Use the button above to save it to your profile.
AIA

Single European corporate tax base moves a step closer

by
5th Jan 2006
Save content
Have you found this content useful? Use the button above to save it to your profile.

The European Parliament has welcomed the EU Commission's proposals for a single basis of tax assessment for companies operating in more than one member state.

The proposals will form part of a debate later this year, but MEPs have already indicated they support the idea of introducing an optional common consolidated tax base which will allow businesses to choose between existing national tax bases and an EU tax base. This will be followed by a review to establish whether a compulsory EU-wide common tax base should be adopted.

MEPs say that operating a common consolidated corporate tax base at European level will not affect member states' rights to set their own taxes at a national level.

They plan to define a framework of common standards which will create a common tax base and develop methods of consolidation, including a method of tax apportionment among the participating member states. This will allow companies to offset and consolidate profits and losses throughout the EU.

MEPs also agreed to launch a pilot project to allow SMEs to adopt home state taxation, which would cut the expense of complying with different national taxation systems.

The pilot scheme will enable SMEs to calculate the taxable revenue of the parent company and all the branches and subsidiaries established in other participating member states by applying the tax rules in force in their home states.

The parliament said: "The potential of SMEs for growth, in terms of markets, cross-border activities and the capacity to establish themselves in other member states, falls foul of the high costs of compliance with the different national tax systems, which have proportionately a far greater impact on SMEs than on large companies."

It also said that member states were not showing enough commitment to getting rid of the tax obstacles which hamper the activities of SMEs.

Tags:

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.